US pre-open: Futures cautiously higher ahead of PPI reading

14th May 2024 11:58

(Sharecast News) - Wall Street futures were slightly higher ahead of the bell on Tuesday as market participants awaited key inflation data.

As of 1300 BST, Dow Jones futures were up 0.08%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.05% and 0.04%, respectively.

The Dow closed 81.33 points lower on Monday, shaving off some of the solid gains recorded in what was the blue-chips best week so far this year.

Tuesday's primary focus will be April's producer price index at 1330 BST, with economists expecting to see PPI gain 0.3% month-on-month. Tuesday's PPI comes ahead of tomorrow's even more closely watched consumer price index, in which economists expect to see a month-on-month rise of 0.4%.

Trade Nation's David Morrison said: "US stock indices were a tad firmer this morning following on from yesterday's mixed session. The main takeaway from Monday's trade was that the Dow finished a touch lower, and so its run of eight successive positive sessions came to an end. Otherwise, the S&P 500 and Nasdaq 100 continue to consolidate, trading sideways and within spitting distance of their all-time closing highs from the end of March.

"Of more importance now are the two US inflation updates this week, with the producer prices index later today, and the consumer price index tomorrow. These releases, particularly CPI, have the potential to trigger some violent moves across all financial markets. That in turn could set the stage for stock market behaviour over the coming summer months. That may sound a bit dramatic considering that the markets don't expect any changes in Fed Funds until the third or fourth quarter, but sentiment is everything. If there's no improvement in this week's inflation numbers, then investors may feel it's a good time to cut their exposure and come back in early September after Jackson Hole."

Elsewhere on the macro front, the National Federation of Independent Business revealed on Tuesday that optimism among small businesses in the US has increased for the first time this year, but still remains well below the long-term average as inflation continues to weigh on confidence. The NFIB's small business optimism index rose by 1.2 points in April to 89.7, as the sales outlook and job-creation expectations both improved.

Still to come, traders will also look to speeches from Federal Reserve governor Lisa Cook at 1410 BST and chairman Jerome Powell at 1500 BST.

In the corporate space, shares in GameStop and AMC surged in pre-market trading after "Roaring Kitty", the Reddit user at the centre of the meme stock craze, posted online for the first time in three years.

Reporting by Iain Gilbert at Sharecast.com